Finance Act 2012 has inserted a new section 80 CCG, This will be applicable for the A.Y. 2013-14.
Following conditions must be fulfilled to claim this deduction:

i. The gross total income of the assessee for the relevant Assessment Year should not exceed Rs. 10,00,000. 

ii. The assessee must be an individual New retail investor, the details of which will be specified by the Government in due course when the detailed scheme is being framed. 

iii. The investment is made by the individual only in such listed equity shares as will be specified by a detailed scheme to be announced at a later date.

iv. The investment in equity shares is locked  for three years from the date of acquisition. 

v. Any other conditions which may be prescribed by the Government in due course. 


For this deduction individual will invest in specified listed shares.  Moreover he must keep these shares in his/her name for 3 years from the date of acquisition. If the assessee, sell his shares before 3 years then the allowed deduction will be deemed income of the year in which default is made.

The amount of deduction is 50% of amount invested in equity shares. However this deduction can’t be more than 25,000/-.  So if a person invest more than 50,000/- in this scheme then also he can claim only 25,000/- max.   One more point in that if a person invest only 20,000,/- this year  and 20,000/- in next year then he will get benefit of only Rs. 10,000/- in this year.  Because as clarify above he will be new retail investor only for first year.  So he will not get any benefit of next 20,000/- which he invested next year in this scheme.

This deduction will not be included in 1 lakh limit of 80 C, 80CCC and 80 CCD.

Section 80CCG doesn’t restrict any individual to take benefit of this scheme. So a salaried person also can get benefit of this scheme.

If the assessee, sell his shares before 3 years then the allowed deduction will be deemed income of the year in which default is made.

Illustration:

Mr. salaried person) took has gross total income of Rs. 8 lakh in F.Y. 2012-13. For taking benefit of this scheme he opened a demat account and invest Rs. 36000/- in notified shares of this scheme. He will get benefit of Rs. 18000/- in A.Y. 2013-14.

Mr. businessman who has gross total income of Rs. 17 lakh opened a new demat account and invest in notified shares. But he will not get benefit of this scheme as his gross total income is more than 10 lakh.

Mr. shopkeeper whose income is 5 lakh invested Rs 40,000/- in this schem on 1st July 2012. He got benefit of Rs. 20,000/- in A.Y. 2013-14 He sold these shares on 30-6-2014. Because he sold shares before 3 years so the full benefit (Rs. 20,000/-) will be added in his income of F.Y. 2014-15.


FAQ asked question on RGESS
1) How will get the tax benefit under this scheme?
To get benefit in this scheme you must fulfill these conditions first


  • You have never invested in equities or you have never traded in equiry derivatives before announcement of this scheme ,so you must be new investor.
  • You may have demat account but no transaction in equity must have done before announcement of this scheme.
  • You taxable income for the year (Fy 2012-13) must be less than 10 lakh.
  • If above conditions are satisfied then you can invest in equity shares TOP 100 in BSE/NSE or in Public issue of  Govt Company (eligible under this scheme)  or through eligible mutual funds or ETF's .
  • You can get 50% of amount invested in above scheme subject to maximum deduction Gross 50000 net 25000/-


2) Which are the Equity we can buy on this scheme?

You can invest in following securities/Equities


  • shares given under BSE100
  • shares given in CNX100
  • shares of Navratnas, Maharatnas and Miniratnas companies 
  • Follow on public offers of above companies
  • IPO(intial public offers) of PSU where turover is over 4000 crore in last years.
  • Mutual funds who has invested in above five type of shares shown above.
  • ETF (exchange traded funds ) invested money only in 1-5 sr number shown above,  


3) Demat Account is compulsary for this scheme?

Demat account is compulsory to invest in shares /though if invest through mutual funds ,in our opinion demat is not required .You can use your old demat account if you are a eligible as new investor.

4) Is amount of exempetion is above 1 lac in 80C?

This exemption is in addition to section 80C . Maximum amount that is eligible under this scheme is Rs .50000/-. Individual will get 50% of the amount invested as deduction ,subject to maximum deduction of Rs 25000/-

5) When can applicable this scheme?

This scheme is applicable from this year it self  mean  FY 2012-13. But detailed notification is available here .In the mean time you can start process of opening of new demat account ,if not already have. However start investing in this scheme only after full details are available ,which is expected to come in 15 days time .(first week of October,2012)

6) Is this scheme is available to HUF

No , This scheme  is not available to HUF . This is available to Individual only.

7) 10 Lakh Income is Gross total Income or net taxable income

10 Lakh is net taxable income after other deductions.

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